THE PARTICIPANTS The Debate
MARGARET BOWLER DIRECTOR, GLOBAL HOTEL RELATIONS, HRG
THE HOTEL BODY Andrea McKay, Chair, Hotel Marketing Association (HMA) The Hotel Marketing Association (HMA) membership comprises a wide range of hotels, from small, family-run independents to huge global chains. Policies relating to how VAT is displayed (inclusive or exclusive) in tariffs varies from company to company. In other words, there is no industry standard on this issue. However, there is one area in which the UK hospitality industry is united on the subject of VAT – it would like to see the rate reduced from 20 per cent to the same level as other European countries such as France with its 5.5 per cent for hotel accommodation. This would create a more level playing field and make UK hotels more competitive with its EU neighbours. For now, any business needs to provide their prices in a way that the majority of their buyers want to see it. In the case of many London hotels this is the corporate market that can recover VAT. The CAP (Committee of Advertising Practice) code acknowledges that when it states “that VAT exclusive prices may be given if all or most consumers pay no VAT or can recover VAT“, so hotels are well within their rights to do so. That is unless the specific marketing communication is likely to be read by mainly the leisure segment that cannot recover VAT. And so is it the corporate buyers
or funded travellers that are having this debate or the self- funded independent traveller? And I wonder whether this has been raised now as travel budgets are being squeezed and overnight stay allowances are being cut. Personally, I think the debate will always be around transparency. Whether you are a leisure or business traveller, no-one likes to be surprised either at the point credit card details are typed in or at the check-out. Hotels and hotel groups should state what is and is not included in the rate they quote at the time of the telephone call. Alternatively, it could be within their rate descriptions online. This may mean a click for a pop-up box or a symbol next to the rate that brings up the small print to ensure they can communicate the details for those that are not familiar with local taxes and inclusions. It is no different to whether breakfast is included or if there is access to an executive lounge. In my view, it will take a number of hotel companies with properties in London to agree to quote including VAT before we shall see a change. An owner or chain that considers including VAT risks not being comparable with their competitors. However, with increased consumer debate and online travel distributors including all taxes and fees in their lead prices, those excluding VAT may review policy, but who will go first and will the others follow?
THE HOTELIER Linda Bekoe, Head of Sales, Grange Hotels The issue of whether or not and/or why hotels – particularly London hotels – may quote VAT exclusive rates is not the most significant cause for concern in relation to VAT and the impact on our industry. As long as it is clear and transparent that VAT is or is not included, and that the total gross rates are transparent and understood by all parties, it is almost irrelevant how the rates are displayed. Indeed, for the organisations which are able to reclaim the VAT, the net rate is perhaps the more important rate to note and to have displayed. A brief examination of the rates displayed on the GDS illustrates that, globally, net rates exclusive of VAT are generally displayed. The more critical issue for travel managers and hospitality providers alike is the actual rate of VAT in the UK and whether or not and/or how this might impact on the competitiveness and perceived value, especially in an international context, of UK hospitality businesses, including those in London.
" It will take a number of hotel groups with properties in London to agree to quote including VAT before we shall see a change"
We are extremely concerned over the relatively high rate of VAT on hotel accommodation, attractions and restaurant meals which, at 20 per cent, is the second highest in the EU. All but two other EU countries recognise the importance of tourism, especially business tourism, on their economies and impose a reduced rate of VAT on hotel accommodation, while many also impose a reduced rate on restaurant meals. France, for example,
has a 5.5 per cent rate on hotel accommodation, Spain eight per cent and Germany seven per cent. Ireland also recently announced a reduced rate of VAT for the hospitality sector (that is hotels, restaurants and attractions) – down from 13 to nine per cent with effect from July 2011. We feel that the ITM should now be actively lobbying government to apply a reduced rate of VAT for our industry and to take immediate steps to improve UK competitiveness for hospitality and tourism, which was an objective which the Prime Minister set last August. The ITM should consider joining forces with
the British Hospitality Association – who have been actively articulating their views – to add weight to the argument. Such joint action, if taken on behalf of both
travel managers and procurement specialists and suppliers in all areas of the hospitality business in the UK, using positive arguments, based on strong evidence, would promote the interests of the entire UK hospitality industry. This is in stark contrast to the present negative effect that the current VAT rates are having on our ability to compete.
Margaret’s career in the hotel industry began when she graduated in hotel management from Portsmouth University. Since that time she has held various senior operational and sales roles for well known hotel chains including Hilton, Queens Moat Houses and the Forte Hotel Group. Margaret joined HRG in November 2000, looking after the company’s UK hotel relations strategy before moving to a global role. She now has responsibility for the HRG global hotel programme, HRG’s specialist hotel division, hotel supplier relationships and the company’s technology-based hotel solutions.
ANDREA MCKAY CHAIR, THE HOTEL MARKETING ASSOCIATION
Andrea McKay is currently product marketing director for BPP University College and prior to that spent ten years with Hilton Hotels. Andrea keeps close to the industry as chair of the Hotel Marketing Association (HMA), the official Market Interest Group of the Chartered Institute of Marketing. HMA is supported by many hotel companies in the UK and exists to provide education in hotel marketing, to help raise the standard of hotel marketing and to endorse good marketing practise.
LINDA BEKOE HEAD OF SALES, GRANGE HOTELS
Linda is head of city sales for Grange Hotels, responsible for territorial business development for the Grange Group of Hotels. Prior to working at Grange Hotels, she worked for over ten years with both independent and larger chains. This included working for a 870-bedroom central London Hotel, as well as various sales positions with Holiday Inn, Intercontinental, Marriott and Jurys in various sales positions. Linda has recently been appointed as a board member after serving as an intern director for two years.
WWW.THEBUSINESSTRAVELMAG.COM I 23
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96